Currency forward rate from covered interest parity. No-arbitrage rate, not a prediction.
forward rate
How to use this tool
Type domestic currency per 1 unit of foreign currency.
Domestic and foreign annual rates for the same period.
Type the number of days until exchange.
It locks in a rate; it does not predict the future spot rate.
Formula & worked example
Worked example: spot 1.10, domestic rate 5%, foreign rate 2%, 365 days. Forward = 1.10 x 1.05 / 1.02 = 1.1324. Forward points = 0.0324, a premium of 2.94%.
Limitations — read this before you rely on it
No-arbitrage disclaimer: covered interest parity gives the rate that prevents risk-free arbitrage given the two interest rates. It is not a forecast of the future spot rate, and real forwards include bid-ask spreads, counterparty and liquidity effects.
Frequently asked questions
A rate agreed today for exchanging currency on a future date. It locks in the exchange rate, removing currency risk for that transaction.
No. It is an arbitrage-free rate implied by interest rates. The actual future spot rate is usually different.
No. This is a calculator from the numbers you enter. Tax, legal and investment decisions depend on your full circumstances, so check with a qualified professional for real decisions.
As accurate as the inputs and the stated formula. It is a model with simplifications listed in the limitations; try a range of inputs rather than trusting one figure.
Yes for the maths, which is currency-neutral unless a jurisdiction is stated. Tax rules, thresholds and market conventions differ by country, so check local rules where they matter.